PIF Partners with FIFA for Major Sponsorship
Newcastle United’s owners, the Public Investment Fund (PIF), have signed a significant sponsorship deal with FIFA for the upcoming FIFA Club World Cup, set to take place later this month in the United States. This newly expanded tournament will feature top football clubs worldwide, including Manchester City and Chelsea from the Premier League.
PIF’s Collaboration with FIFA
PIF will not only sponsor the Club World Cup but also holds a minority share in DAZN, the tournament’s primary broadcaster. Earlier this year, SURJ Sports Investment, owned by PIF, invested $1 billion in DAZN.
Finance expert Adam Williams from TBR Football commented that PIF’s involvement with FIFA for the Club World Cup isn’t surprising, given its investment in DAZN. “Saudi Arabia has been backing the Club World Cup through its stake in the tournament’s broadcasting partner,” Williams noted.
Concerns About the Tournament’s Viability
Williams pointed out skepticism within the industry about the media rights deal, valued at over £750 million, especially considering its audience might not compare to the viewership of the Qatar World Cup. He expressed doubts about whether FIFA truly has a compelling product on its hands, particularly in light of disappointing ticket sales.
While the expanded Club World Cup has potential, the current hype seems exaggerated. “It feels somewhat desperate,” he said, suggesting that there are concerns about the actual market value of the rights deal.
Implications for Newcastle United
This deal raises questions about Newcastle United’s standing, as Williams believes the club is not PIF’s primary focus. He remarked, “They’re effectively funding several of their rivals, not only in the Premier League but beyond.” For instance, if Chelsea wins the tournament, they would nearly gain £100 million in prize money, which strengthens one of Newcastle’s direct competitors.
Financial Constraints Affecting Newcastle
As PIF expands its football investments, Newcastle United faces limitations due to the Premier League’s financial regulations. The club is aiming to enhance its squad this summer but has found challenges, with certain player valuations being seen as too high.
To improve their financial standing, Newcastle must boost revenue through player sales or sponsorship arrangements, yet they have no intention of selling their key players. Being back in the Champions League promises to positively impact their finances, and projections by Williams estimate that Newcastle’s revenue may reach £400 million by next season.
